Marketing New Casual Footwear in the UK - Case Study Example

A report on marketing our new 'casual footwear' in UK Drastic change in sportswear marketing environment in span of a decade Times have changed.Gone are days when sports consisted of only the game. Nowadays a whole lot of things are involved in it. Of all these, sportswear grab major attention from all spheres. So now, the sports is as much about the game as much it is about the accessories related to it. This factor has given rise to a drastic change in the sportswear environment over the past 10 years. Not only playing good but also looking good has become an important factor. All that is worn by the players on or off the field becomes hot products. People want exact replicas of such products to call their own. This consumer demand has led to companies like ours, which exclusively cater to this segment of society, sell the sports product like hot cakes because sportswear has rapidly turned into an ever-growing and lucrative market. The youth form a majority of the total buyers of these products. Parry, 2004 has rightly stated that "There has been a significant change in the sports market over recent years driven by a number of key factors, including the high-profile media coverage of sport, the huge marketing budgets of the global brands and the increasing fashion appeal of sports clothing." Keeping in mind this global scenario I would like to bring to your notice that it is the best time to launch a product like our casual footwear. We are bound to be successful if we do the proper planning by using appropriate planning tools in order to develop our marketing objectives and strategies successfully. According to Ideas factory, "Market research pundits estimate that only 20% of all sports footwear will be used for the purpose intended, with the majority being flaunted as casual, fashion or even collector's items." Even fashion giants are trying to lure the local as well as international market segment with their sportswear products. It has rightly been mentioned by the Ideasfactory website that, "The trend has persisted since the mid-1990s when Jil Sander took a shine to Puma's King football boots and had them modified for the catwalk." Hence being a company that spealizes in sportswear, we have 100% potential to shine in the casual footwear for youth market. Only one thing that we should concentrate on is that today's market especially youth; not only get motivated by the comfort quotient but the fashion quotient too. So we have to belong to the fashion pack to avoid any bumpy ride in future. Use of planning tools Our company can make use of the following planning tools to be able to develop its marketing objectives and strategies to reach out to its target market. Boston Consulting Group's Product Portfolio Analysis: It is one of the best product portfolio analysis methods. According to this we have to first classify our 'Strategic Business Unit' (SBU) - our new product; the casual footwear on the following dimensions. 1.Relative market share (horizontal axis) - through this we will be able to derive the strength of our product in the market. 2. Market growth rate (vertical axis) - through this we will be able to judge the market attractiveness quotient. If we divide the matrix into four areas we will get four categories of SBU's from which we can choose the category of SBU our new product belongs to. These four areas have been named in the following ways: Stars: those products that are strong in the market in comparison to their competing brands. They need great investments because they are considered high growth ventures. Cash Cows: these products have low growth rate but their market share is very high. As they are well established and successful, they don't need much investment. But they need to be managed rigorously so that the profit continues, so that company can use this profit for heavy investments required by the 'star' category of products. Question Marks: The products that come under this category have low market share but they operate in markets that see higher growths. Therefore if substantial investment is made they have the potential to increase their market shares even when there is tough competition. Dogs: As the name signifies dogs are those products that operate in low growth markets and have low market share too. They may generate cash if invested in but are not considered a good choice for investment purposes. Our new product falls in the question mark category. So in this case we have to make great investments to make it one of the cash cows of our company. According to the Boston Consulting Group's Product Portfolio Analysis there are four possible strategies for each product. Since our new product has the potential to go to great heights out of the following four strategies we will have to make use of the first strategy. Build share: companies invest to increase the market share and profitability. Hold: not much investment is required as product is already doing well so just enough investment is made to keep the SBU in its current position. Harvest: To maximise the profitability, the companies start reducing their investments on the product. Divest: In this strategy the company either phase off the product or sell it off so that resources are used on more promising products. Going by this we have to use the Build share strategy at the initial stage and then gradually start using the harvest strategy. During all this we have to aim for the Hold strategy that we use for our other products. Ansoff's Growth Matrix: According to this planning tool, for growth we have a choice of four strategies - market penetration, market development, product development and diversification. For our new product we can make use of the fourth strategy i.e. diversification which means we are marketing a completely new product (casual footwear) to a new market (the youth). Had we indulged in unrelated diversification there was scope for apprehension. Since we are into related diversification, as we are not changing the industry we originally belong to, there are chances of optimum growth if we use the correct pricing strategy and powerful promotional techniques. Stages and actions for our new product development The first step is to decide about the product. We have already done this. The aim of this report is to throw light on how to proceed from here. The second stage will require to identify the need and wants of the consumers who are young either by age or at heart and are willing to spend money on a shoe that gives them comfort and helps in building a fashion statement. Taking the help of market research to understand what the consumers within the broad product market desire can do this. The third step is to work on the aggregation of this group, which we want to reach out to, into the broader market segments. We can get this information by basing our research on product utility interest. The fourth step is to select our exact target market so that we are able to ensure successful launch and commersialisation of our new product. Lastly we should work on the development and implementation of the marketing mix. The 7 Ps i.e. product, place, price, promotion, packaging, pace and people should be considered an ideal variable to reach our desired heights. Therefore it is not enough to just develop the right product but also to make plans of how to launch it using a distribution network which is beneficial to both - the target market segment and of course our company. In this context Arens and Bovee (1994,p.139) have rightly pointed out that it is important to "find groups of people with similar needs and tastes that can be satisfied by the product. And they must amass enough of these groups to make the product marketing process successful - and profitable." Formulation of a pricing strategy Pricing is one of the most important elements of the marketing mix. Our goal should be to introduce a price, which helps in stabilizing the market, increasing the profits of our company and helps in this particular product growth and in the overall growth of the company. Like never before prices and margins is facing downward pressures. Since the customers always demand lower prices we should use a value added approach to increase sales. For pricing strategy following information is required: 1.Knowledge of the prices of the competing brands because no one will buy the other brand if there is much difference. 2.Knowledge about the target market's needs and desires 3.Knowledge about consumer decision process and how far can they go to buy a product from a reputed company like ours. 4.Our cost price and what percent of profitability can we afford in the initial stage. 5.The price of a similar product of our company. 6.Whether the capacity to perform is better than the current available alternatives. 7.Does the product have the capacity to satisfy the key purchase motives of the target market 8.Since our product is aimed towards the youth, does it have the capacity to perform in the foreseeable ways it might be expected to Hawkins, Best and Coney (1992, p.652) have rightly stated that we "must set a pricing policy that is consistent with the desired product position. Price must be broadly conceived as everything a consumer must surrender to obtain a product. This includes time and psychological costs as well as monetary costs." Thus we should focus on following factors as part of our pricing strategy 1.We have to do our pricing keeping in mind that the target market can afford this product after covering all their expenses. 2.If we sell our product at a lower price initially, it will help us in inducing product trial or diffusion in the market 3.Since the younger generation has the urge to get a good product, at a later stage a slight raise in the price too, will not affect our profitability negatively. 4.The price is an indicator of status and this is an important aspect of the youth attitude towards different brands; the young target market might get attracted to this factor too at the later stage as they might think that a little raised price is an indicator of high quality. Promotional techniques for the new casual footwear Our aim should be to plan and coordinate the promotional activities in such a way that we are not only able to achieve our sales targets but also build up a strong image for our new product. When we will introduce our product in the market the sales will soar slowly. We will have to do extensive promotion of the product to bring it to the notice of the consumers. We will have to use all media of communication for reaching out to the desired market. Since this will be our introductory stage, this will be the time when we will have to invest in the promotional campaign, the most. The second stage is a very critical stage and in this stage the sales will pick up very quickly. The cost of promotion per unit will be very low in this stage, as the cost would be spread over a large volume. We will have to continue all the promotional activities with may be a slight decrease in the activities. In the next stage of adoption the sales will get stabilised. We will have to face competition too. This might push down the sales of our product. At this stage we will have to increase all the promotional activities. On a positive note we should assume that our sales again would reach to the second stage i.e. the maturity stage rather than the decline stage. Therefore we will have to keep on improving our sales effort. For the near future, that is the introductory stage of our product, I would like to suggest that we should advertise in the following media as part of our promotional campaign to ensure a strong entry in the market. 1.Print Media: Newspapers - especially Sunday, and weekly and weekend supplements. General interest magazines that cater to youth. 2.Broadcast Media: Advertisements during all programmees of interest to the youth on the radio and Television. 3.Web advertisements 4.Out door and transit media. 5. Specialty media like exhibitions, sales, T-shirts, caps, stickers, badges etc. By appropriate variations we can surely be winners now as well as in the future. References Arens, W.F., and Bovee, C.L., 1994. Contemporary Advertising. 5th ed. USA: Irwin. Chunawala, S.A., Sethia, K.C., 1995. Foundations of Advertising Theory and Practice. 5thedition. Bombay: Himalaya Publishing House. Hawkins, D.I., Best, R. J., and Coney, K.A., 1992. Consumer Behavior: Implications For Marketing Strategy. 5th ed. USA: Irwin. Rue, L.W., and Byars, L.L., 1992. Management Skills And Application. 6th ed. USA: Irwin. Weitz, B.A., Castleberry, S. B., and Tanner, J.F, JR., 1992. Selling: Building Partnerships. USA: Irwin. IDEASFACTORY UK- Art &design zone., 2006. Best Step Forward. [online]. Available from: http//www. Ideasfactory.com/art_design/features/artdes_features53.htm [cited 6 January 2007]. Parry Caroline., 2004. Sportswear rides on fashion wave. [online]. Available from: http//www.findarticles.com/p/articlesmi_go1550/is_200406/ai_n6325050 [cited 6 January 2007]. Tutor2u., 2006. Product portfolio strategy - introduction to the Boston consulting box. [online]. Available from: http//www.tutor2u.net/business/strategy/bcg-box.htm [cited 6 January 2007]. Read More